The Cadillac Tax Scam Explained

Nov 14, 2014

RUSH: Now, I had somebody, a lot of people — and I’m glad for this because I thought we covered it yesterday in an understandable way. But I had a lot of e-mails from people who want this Cadillac Tax scam explained, and I don’t mind going through this again, because it is really crucial that you understand this.

Gruber said, among many things — and we’ve got audio supporting all this coming up here, including the new Gruber video, the fifth one now, about Ted Kennedy ripping off the federal government to the tune of $400 million a year. Ted Kennedy was in on the scam and Gruber was proud of it and was out telling everybody what a great guy Ted Kennedy was for helping come up with a way to scam the federal government with Obamacare.

But the Cadillac Tax, here’s what Gruber said in one of the videos to one of his audiences. He said, “Once again, that ultimately,” the Cadillac Tax, “became the genesis of what is called the Cadillac Tax in the health care bill, which I think is one of the most important and bravest parts of the health care law and doesn’t get nearly enough credit.” What was the Cadillac Tax? It was nothing more than a trick.

It was designed to trick consumers and policyholders into blaming their insurance companies for tax-induced premium increases. That’s what Gruber here is describing as brave. They raised taxes on these Cadillac plans, the most expensive plans — they tax the insurance companies 40% — and that was the trick. They made consumers believe that the tax was going to be paid by the insurance companies who the people hated already.

So therefore the people supported it because this was the evil, big insurance industry getting socked. The old class envy, class warfare scheme. So they trick policyholders, people who have health insurance plans, into blaming the insurance companies for that 40% tax increase. So they turned on an innocent victim, the insurance companies. They were sitting there minding their own business.

And one day there was a mandate that came from Washington. That mandate was there’s gonna be a 40% tax on health insurance plans over and above a certain amount of money, the Cadillac plan. The government mandated that tax increase on the insurance company. The insurance companies then pass the tax increase along in the form of higher prices. It was the Regime that ultimately caused everybody’s prices to skyrocket.

The trick was blaming the insurance companies for it. And in this case, the insurance companies were the innocent victims. They were turned into a villain in order to distract everybody from the government scheme to fund an affordable lie. That’s what Gruber is calling brave: The trick they played to convince you that the insurance companies were screwing you and not the Regime.

Only a conman would call this brave, and only a fraudulent media would excuse or ignore it. The fifth Gruber video which has emerged — and, again, it was found by an average citizen, not the Drive-By Media. They still have been dragged kicking and screaming into this. It’s a video from Vermont that shows Jonathan Gruber mocking a Vermont citizen who expressed concern about single-payer health care. It’s a 2011 video shot by TrueNorthReports.com.

It was released yesterday, and in it Gruber appears before the Vermont House Health Care… This guy was everywhere selling this, and Pelosi says she never heard of him, and Obama says he doesn’t know who he is. The guy was everywhere. He was the golden boy! He was the architect. At one point, they loved this guy. He was the guy that enabled this scam to become law. In this instance, he’s at the Vermont House Health Care Committee to present recommendations for a universal, publicly financed health care program.

The recommendations were part of a report submitted to the legislature by an economist up there and co-written by Gruber. “As Gruber sits listening, the committee chair reads a comment from a Vermonter who expresses concern that the [Gruber]’s plan might lead to ‘ballooning costs, increased taxes and bureaucratic outrages,’ among other things.”

The chairman of the committee read this letter from an average Vermont citizen expressing concerns about Gruber’s plan. “After hearing the Vermonter’s worries, Gruber responds, ‘Was this written by my adolescent children by any chance?’ The remark was met with uproarious laughter.” See? Here’s a legitimate citizen who had nailed it.

He’s listening to all this. “Wait a minute. Isn’t this gonna cause costs to just skyrocket, taxes to go up? Isn’t this gonna just cause massive bureaucratic nightmares?” And Gruber said, “Mr. Chairman, was this written by my adolescent children, by any chance?” Mocking average people. Mocking citizens. That’s who Gruber and his elitists are.

This video is the fifth in a string of videos to surface this week in which [Jonathan Gruber, MIT], publicly mocks citizens or brags about his use of deception in crafting health care policies. He was being paid, by the way, $400 by the state of Vermont to advise the governor there on how to finance Vermont’s single-payer health care law.

“The video is the fifth in string of videos to surface this week in which [Jonathan Gruber, MIT] publicly mocks citizens or boasts of his use of deception in crafting health care policies. Gruber is being paid $400,000 by the state of Vermont to advise [the governor] on how to finance … VermontÂ’s single-payer health care law.”

This is back in 2011, so three years ago. You had 400 grand from the state of Vermont alone. That’s not inclusive of what the Feds were paying him, which is into the millions now.

BREAK TRANSCRIPT

RUSH: One more thing here on this Cadillac Tax business. It’s June 13, 2012. Gruber gets interviewed by Frontline on PBS, and he told ’em that the Cadillac Tax issue was addressed in 2009. We played audio sound bite of Gruber mentioning that he had been in the Oval Office and talked to Obama about this and how brilliant Obama was and how they needed something here that would get them a really good score from the Congressional Budget Office.

They needed a mechanism to have the total cost for Obamacare come in at under $1 trillion, and the reason for that was that’s what the Iraq war cost, theoretically. One of the sales pitches on Obamacare was, “Well, it’s not gonna cost us any more money because we’re gonna get out of Iraq and we’re just gonna take that money — which is already allocated and everybody’s used to it being spent — and we’re just gonna do health care for everybody. It’s a beautiful thing!”

They needed that number to come in under $1 trillion for a whole host of reasons. That was the big one. But it was gonna cost much more than $1 trillion, as everybody now knows, and we knew then. But they had to come up with a trick. They had to come up with a bunch of tricks. They had to trick you, they had to trick the insurance companies, and they had to trick the CBO. They did it with the Cadillac Tax.

Economists that were in the room with Obama and Gruber said the number one thing that had to be done was to take on the tax subsidy to employer sponsored insurance. Now, that tax subsidy to employers, what the hell is that? Well, notes here that, like all good leftists, Gruber is calling the lack of a tax on expensive health care plans a tax subsidy. A tax subsidy is when the government thinks that a business or an industry or an individual is getting away without paying taxes.

Remember, all money is Washington’s in their view. All money is Washington’s, and what anybody ends up with is the result of policy and their good intentions. You don’t earn what you make. You get to keep what they let you keep. That is their attitude. They use the tax code for this. The fact that these expensive health insurance plans did not have an appropriate tax on them offends them. They called this — the absence of a tax — a federal subsidy.

For example, I’ll make this very simple. You earn $100,000 a year, and you have a tax rate of… I’m just gonna pick numbers here to make it easy. You earn $100,000 a year, and you have a tax rate of 40%. So you pay $40,000 a year in taxes. The government looks at what you keep, the $60,000, as a tax subsidy. They are not taxing that. If they said, “It’s unfair! You should be paying $50,000 a year in taxes,” then they would conclude that you had a $10,000 tax subsidy that they needed to fix.

“It’s unfair that you should only be paying $40,000 out of the $100,000 you earn. So what you’re not paying in taxes, in their world, is because of their good graces, and you are being subsidized by the government. Anybody who has any money left over after paying their taxes is essentially being subsidized by government. This is how they look at it. I know you’re saying, “Come on, Rush! You can’t explain us to believe that.” Yes, I do. I’m begging you to understand it!

If I could wave a magic wand and have all of you understand how liberals think and what they do, how they take their beliefs and implement them as policy, I would. How in the world can you look at the Constitution as a charter of negative liberties? But they do. They look at money that you are not paying Washington as a tax subsidy. They look at a number of other things they call imputed income. For example, if say you don’t pay tax on some of your employment benefits. That also is a tax subsidy.

You are getting an unfair deal. You should be paying. That’s income. It may not be cash, it may not be salary, but it’s income, and you should be paying tax on it. If you’re not, they look at it as them being nice to you and subsidizing you. So they’re sitting here in the room, and they’re trying to come up with a mechanism to get this number under $1 trillion, and they can’t do it no matter how they try, ’cause it’s gonna cost much more.

Until Gruber and the guys come up with the Cadillac Tax idea ’cause it fits perfectly with class envy and the class warfare meme. They’re gonna announce that they’re gonna levy this massive tax on insurance companies because they’re being subsidized already. “They’re not paying enough taxes on these plans as it is, and we’re talking about the rich, and they’re getting away scot-free! We gotta end that tax subsidy,” meaning: “We’ve gotta levy a tax on this money!

“It’s not fair insurance companies are keeping that. That money is ours, that money is government’s, ’cause all money is government’s.” So, like all good leftists, Gruber is calling the absence of a tax — the fact that there is no tax on an expensive health care plan — a tax subsidy. In other words, the government is paying for it, but not getting any money back for it. So it’s the tax subsidy economists have been wailing and moaning for decades over all the money they’re losing on all the activity in health care that isn’t being taxed.

They wanted to get some of it back. That’s also part and parcel of Gruber applauding Ted Kennedy’s scam to have Romneycare actually paid for by $400 million in federal taxes. And for that, “Ted Kennedy was a great guy. You’ve heard of him. We got a very powerful guy here in our state, Ted Kennedy. You may have heard the name, and I’m telling you that guy is brilliant! He found a way to scam the Feds out of $400 million.” In other words, Ted Kennedy found a way to scam the scammers.

They’ll come up with their tax subsidies, and Ted Kennedy found a double scam whammy on ’em, and Gruber’s out there applauding all this. Because, you see, at the end of the day what enabled them to sell this is you can’t let the rich have better health insurance than the poor, even if they’re paying for it. The fact that they were paying for it, that makes it even worse because they can afford to pay for it, and that’s not fair. So there are two things that are not fair here!

The rich had better health insurance than the poor and the rich were able to pay for it themselves, and both of those are unacceptable. So they devised a scheme to make everybody think that they were really socking it to the insurance companies for this Cadillac Tax. Class envy, class warfare. Get the little guy celebrating that the big, bad insurance companies gonna get theirs. They were this counting on the fact that a tax increase on businesses, as far as the public is concerned, is fine.

They will not know that this money is gonna be passed on to everybody else in higher premium costs so the company/the industry is not actually paying it when all is said and done. They were out applauding the stupidity of the American public not understanding economics, and that’s what all this is really basically about. So today Obama has arrived on the scene expressing outrage and anger, that he didn’t know about any of this.

He’s embarrassed, and they’re gonna take care of this guy. This is unacceptable!

Just like Obama’s been outraged at everything else he did when he found out what he did, and he always finds out about it in the media.